Insurance glossary
Workers' compensation insurance
Updated 2026-06-12 · by Brokly
In plain terms: Covers medical costs and lost wages if an employee is hurt on the job; a certificate confirms you carry it (required in nearly every state).
Why it matters to you
It is usually the first insurance the law requires of you — in most states the duty starts with your first hire. It pays the injured employee's medical bills and part of their wages, and in exchange the employee generally can't sue you over the injury.
Where you’ll see it
State law triggers it when you hire; general contractors and clients also ask for proof of it on certificates. The rules — who counts as an employee, when coverage is triggered — are set state by state.
Related terms
Definitions describe how policies are typically structured — exact terms live in the policy. Not legal or compliance advice.
Sources: NAIC — Glossary of Insurance Terms (Workers' Compensation) (retrieved 2026-06-12) · NAIC — Small Business Insurance (retrieved 2026-06-06)